Jordan: Funding for the IFFCO/JOPH Phosacid Project

The International Finance Corp. (IFC), a part of the World Bank, is lending Jordan India Fertilizer Co. US$215 million to build a phosphoric acid plant in Eshidiya, some 200 km south of Amman, Jordan. The plant was scheduled to be completed by the end of 2012 and the total estimated investment value of the project is about US$625 million.

The plant, for which the European Investment Bank (EIB) is providing another $120 million, will have a production capacity of 1,500 tons a day (475,000 tonnes per annum). A US$225 million sulphuric acid production line addition, which will follow the plant’s construction, is expected to yield 4,500 tonnes per day of sulphuric acid. It will also include utilities and a power plant. Water will be recycled.

Jordan India Fertilizer is a joint venture between Indian Farmers Fertilizer Cooperative Ltd., which has 52 percent, and Jordan Phosphate Mines (JOPH) Co., the world’s second-biggest exporter of phosphate rock, with 48 percent. JOPH has agreed that a minimum of 70% of the raw acid from the Jordanian plant would be exported to India for IFFCO, which is the largest fertilizer producer and distributor cooperative in India. The project was announced in 2008 and it uses nearby captive phosphate rock.

In 2010 the total bilateral trade between Jordan and India stood at US$1.4 billion, exporting Jordan mainly phosphate and potash to India and it imports mainly garments, pharmaceuticals and agri-equipment. In the last three years, some 20 Indian companies have set up manufacturing units in Jordan in various sectors like garments, pharmaceuticals and agricultural equipment.

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Vietnam: Expansion of the Domestic Urea Industry

The Vietnamese Ministry of Industry and Trade estimates that the fertilizer market will see considerable changes due to export tax reductions in the Chinese market while fertilizer prices continue rising in the world market in June.

Urea fertilizer demand currently ranges between 2 to 2.2 million tonnes per year. It is expected that Viet Nam would be able to produce 3.22 million tonnes of urea fertilizer a year by 2015.

The country has two urea fertilizer factories including Ha Bac Nitrogenous Fertilizer, with a production capacity of 180,000 tonnes per year, and the Phu My Fertilizer Company, with a capacity of 740,000 tonnes per year, which had been expanded to 800,000 tonnes since the fourth quarter of 2010.

Fertilizer supply currently stands at between 920,000-980,000 tonnes a year in comparison with actual demands of 2-2.2 million tonnes per year.

According to the Viet Nam Chemistry Group (Vinachem), nitrogenous fertilizer, to be produced by the Ninh Binh Plant, will reach 560,000 tonnes per year by November.

The Ca Mau Fertilizer Plant, with a capacity of 800,000 tonnes per year, is set to be completed by the end of this year while the development of the 560,000-tonne Cong Thanh Fertilizer Plant will be kicked off later this year.

By building more plants between 2010-14, urea output will rise to over 3 million tonnes by 2015.

It is predicted that, by 2015, the domestic urea fertilizer market share will experience much competition between local manufacturers and importers.

Last May, the IFA (the roof organization of the fertilizer industry), estimated that worldwide 58 new urea plants are expected to come on stream between 2010 and 2015, increasing capacity by 44 million tonnes N, to 224.5 million tonnes in 2015.

Russia: The Uralkali and Silvinit Merger Has Been Completed

The merging of OJSC Uralkali and OJSC Silvinit has been completed and was approved by competition authorities in Russia, Ukraine, China, Brazil and Poland. Uralkali had a capacity of some 5.5 million tonnes KCl and Silvinit 5.1 million, both having their operations in the Perm region  of central Russia. Uralkali is nowadays performing a 27% capacity expansion to 7 million tonnes KCl and expects to complete the project in 2012. Also Silvinit plans to increase its capacity to 5.6 million tonnes KCl already in the current year, and to 6 million in 2012. Silvinit has also a greenfield project at their Polovodovsky site. Uralkali had agreed to acquire Silvinit for $7.8 billion in cash and shares last December. The combined entity will have capacity to mine more potash than Potash Corp. of Saskatchewan, currently the world’s biggest producer. Uralkali aims to increase the production capacity of existing operations from 10.6 million to 13 million tonnes in 2012 and the combination is expected to lead to significant synergies, including, among other things, operational, SG&A and transportation efficiencies and integrated development of the asset base.

Australia: CSBP gets funding for TAN expansion

CSBP Limited, a subsidiary of Wesfarmers Limited and part of the Wesfarmers Chemicals, Energy & Fertilisers division, announced last June that it had received Wesfarmers Board approval for $45 million to fund long-lead equipment orders and continued detailed engineering work for the company’s 260,000 tonnes per annum proposed expansion of its Kwinana ammonium nitrate production facility.

The proposed expansion would involve the construction of a new nitric acid plant and ammonium nitrate plant, and an upgrade of the existing prilling plant, initially increasing CSBP’s overall ammonium nitrate production to 780,000 tpa and enabling the company to meet forecast demand for explosive-grade ammonium nitrate from the growing Western Australian iron ore mining sector.

According to the company, the additional production capacity will exceed demand from the State’s explosives sector until approximately 2020, so that their ability to divert surplus product into CSBP fertilizer products will enable them to maximize production in the next years.

The project is expected to cost approximately $550 million and the expansion is forecasted to be completed in the first half of 2014.

Mexico: Israel Chemicals to acquire Cosmocel Química

Israel Chemicals Ltd. has signed an agreement to acquire Mexican functional food ingredients and specialty chemicals manufacturer, Cosmocel Química SA de CV. Israel Chemicals did not disclose the size of the deal, but said that it expects to close it very soon.

This is Israel Chemicals’ third acquisition this year, after acquiring Spanish fertilizer company Antonio Fuentes Mendez SA in April, and completing its acquisition of US company Scotts’ Global Professional business in March. Israel Chemicals is also investing heavily to expand its Spanish potash unit Iberpotash SA, expecting to complete it in 2014.

Cosmocel Química is a subsidiary of Monterey-based Cosmocel SA, a private manufacturer of specialty industrial chemical products, as well as food additives, specialty nutrients, and coadjuvants for agricultural markets. The company was founded in 1960.

ICL Performance Products will acquire Cosmocel Química’s state-of-the-art manufacturing facility in Monterrey, Mexico and its extensive sales and distribution network in Mexico, Central and South America. Cosmocel Química will operate as ICL Fosfatos y Aditivos México.

ICL Performance Products had in 2009 revenues of US$1.3 billion, which includes some US$34.5 million in internal sales. They are number one worldwide in glassy phosphates and specialty phosphate blends; second global producer in potassium phosphates; in Europe, they are in second place in dairy and farm hygiene and third in total food hygiene; in the Americas, they are a leading marketer of food phosphates; and leaders in merchant industrial phosphoric acid sales, electronic-grade specialty phosphoric acids & wildfire safety products. Their major markets are in Europe, North & South America, and Asia; their operating income in 2009 was of US$162.7 million.

Israel: the potash industry and the Dead Sea

Both the Israeli potash manufacturer Dead Sea Works and the Jordanian Arab Potash Company pump out water from the Dead Sea for their evaporation pools. The Dead Sea is considered one of the natural wonders of the world. Because of the industrial activity, millions of tonnes of salt are left annually on the floor of these pools in the southern shores, causing the water to rise 20 centimeters a year. The Israeli Dead Sea tourism revenue totaled some US$300 million last year, propping up an industry that accounts for thousands of jobs in a part of the country that otherwise offers limited employment opportunities. But it has been calculated that without some kind of intervention, in five to 10 years, the water would flood the Israeli hotel lobbies. Half of the 3.45 million tourists to Israel paid a stop there in 2010. Almost 200,000 stayed in the 4,000 hotel rooms along the lake. Locals flock there too, with more than 630,000 – or almost one in 10 Israelis – spending time at Dead Sea hotels last year.

A Dead Sea Preservation Government Company (HELI) report concluded that the salt accumulated on the south basin of the Dead Sea must be harvested in order to foil the threat of flooding.

In the Dead Sea’s northern basin the water level is dropping and a barren, pockmarked moonscape has replaced sandy beaches. The World Bank is studying a decades-old proposal to replenish the northern Dead Sea’s waters by channeling water through a canal from the Red Sea, more than 160 kilometers south. With costs estimated at up to $15 billion and the environmental side effects unpredictable, the Red-Dead canal is unlikely to be built any time soon. The Dead Sea Works says it could dredge the salt from the evaporation pools and send it north, and is negotiating with the government about its share in the project costs.

Dead Sea Works belongs to Israel Chemicals, it is the sixth global potash producer and the second one in Western Europe, and has a capacity of about 5 million tonnes potash, including the Spanish IP, purchased in 1998, and the English CPL, acquired in May 2002. The Arab Potash Co. has a capacity of 2.4 million tonnes is planning to produce at above its nameplate capacity this year, as it continues to fine-tune its solar evaporation and refining facilities on the Dead Sea shores. Estimated production in 2010 was of 2.1 million tonnes KCl for Israel and 1.2 million for Jordan.